I wrote a post almost two years ago to the day titled Putting the supplier cart before the distributor horse in travel.
In that article in November 2012, I outlined a basic structure for connecting online travel agencies to supplier reservation systems using an inbound API.
Finally, we are one step closer to the world I had hoped would eventually emerge.
Viator, which was acquired this summer by TripAdvisor, has been busy developing just such an API with the express goal of providing real-time connectivity between suppliers and their network.
Now that TripAdvisor owns the API, will other OTAs follow the lead and develop their own?
No one likes to be first
Let's be straight here, lots of people (and companies) like to claim that they are the first to do this or that, but very few actually like to be the first to do anything.
In this case, Viator saw the need, took the leap, and developed its own connectivity.
What it has created is a first for tours and activities, but certainly not a first in the travel industry.
I like to think that the structure I proposed back in 2012 had something to do with it, but knowing the team at Viator, they probably already thought about it.
Sure, Viator is the first to do it, but it makes sense considering there are some really good tour and activity management systems out there that a lot of operators are starting to use.
Let's also not forget that distribution and connectivity with multiple supplier systems has been around in the air, hotel, and car space for quite some time.
It simply makes sense to create something that these supply side systems can connect to in order to share data.
In essence, what Viator created is similar to what TripAdvisor created with its Connect service, except that instead of allowing hotels to connect, it is allowing tour and activity systems to participate.
Understanding where we all fit in the food chain
When PhoCusWright first released its research on the in-destination tours and activities market (When They Get There (and Why They Go)
), it became fairly clear that the market is highly fragmented, multi-layered, and disconnected.
What also became abundantly clear is that there are several distinct silos of technology and innovation.
- On the supply side - there is a lot of activity around inventory management, CRM, and direct to supplier online bookings.
- On the retail side - there are new consumer "marketplaces" that allow travellers to book tours and activities on the web and mobile.
- On the distribution side - we have a mix of supply side technologies trying to extend into retail and retail technologies trying to extend into inventory management.
What seems to be missing is many to many connectivity between B2B and B2C.
But why can't supply side technologies extend into retail and vice versa?
There's nothing to say that they can't, but history has shown that it favours those that specialize, as far as air and hotels are concerned anyway.
As with air and hotels, as technologies begin to settle into their appropriate places, new technologies on the distribution side will emerge.
Channel management tools that connect the supply and retail sides of the equation will be developed to help both sides optimize revenues more effectively.
For now, however, given the very limited number of supply side systems and even fewer large scale retailers, a retailer based in-bound API strategy, seems to be the most effective next step.
Tours & activities is a multi-channel world
For many operators, especially the ones located in popular markets like Las Vegas, New York, or Honolulu, the world is made up of many different OTAs and resellers.
In-destination tours and activities, although predominantly sold through direct channels, still relies heavily on relationships with partners like Viator, Expedia, Orbitz, GetYourGuide, and even new players like Peek, BeMyGuest, and Excursiopedia.
The biggest challenge, however, that most operators face is the management of their products across these multiple channels.
Up until the recent release of the Viator supplier API, all of these OTAs have relied on extranets as the primary means for suppliers to manage their product data and availability.
As you can imagine, trying to run a small tour operator business and manage inventory across multiple extranets is both time consuming and inefficient.
The Australian Tourism Data Warehouse (ATDW) and the Tourism Exchange Australia (TXA) have attempted to address the multi-channel world by providing a distribution layer that connects many suppliers to many retailers.
From a technological standpoint, this is as close to an ideal scenario as I have seen.
Unfortunately, it's adoption (at least with tours and activities) has been limited by its complexity and regional specificity.
The better option for now, in my opinion, is for distributors to develop direct connectivity for supplier systems and look to create some common messaging standards upon which to base this connectivity.
Brave new world of distribution
If the growth in distribution of tours and activities follows a similar path to hotels, we can expect to see an increase in interest in the distribution of these products and services in the coming years.
With hotel based OTAs, once enough hotels began using a property management systems (PMS) that could be connected, these same OTAs began shifting away from extranets in favour of direct connects or connections with switches like Pegasus.
The reason for this shift is simple, live availability is critical.
Tours and activities still has a long way to go.
If PhoCusWright data is to be believed, and there is no reason not to believe it, then the vertical is not yet ready for the type of distribution that many seem eager to embrace.
Before that open distribution of tour and activity product can happen, more tour operators need to use systems that allow them to manage their products and allow direct connectivity and more OTAs with proven B2C scale need to push for live availability and create inbound APIs similar to the one Viator has released.
Once there is enough critical mass on both the supply and retail sides, the industry can look beyond direct connects and begin to explore more sophisticated distribution mechanisms.
NB:Kid astronaut image via Shutterstock.